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e0e3fe41bb0833767b9ba0e126fe49559f5a7915f22c0a61ccc3d848b0b7c298;;[{"layout":"detailed","uid":26901,"publicationDate":"17 Dec 21","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2021_182023.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVCsY1pNwWYpS6IVUmwpko-O-UFiiTLh3Xg==&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2022_182057.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVIRKs7N21TUlnOaJCkTYBWrajTGlzzaJhQ==&T=1&T=1","protectedFileLinkIt":""},"title":"Euro Credit Pilot: MNMB version (December 2021)","titleDe":"","titleIt":"","product":"Euro Credit Pilot - Strategy","synopsis":"<p class=\"ucrIndent\"><p>This is a shortened version of the Euro Credit Pilot, which we deem to be an acceptable minor non-monetary benefit under MiFID II.As credit enters the next leg of its prolonged late-cycle phase, the environment is becoming more challenging. Rising inflation, higher yields, supply-chain friction and a fourth wave of COVID-19 cases represent key sources of volatility. However, the impact on performance is expected to be contained by technical factors.<\/p><\/p><p><ul class=\"ucrBullets\"><li><strong> Macro Outlook: <\/strong> At 3.9%, growth in the eurozone economy is likely to be weaker than previously expected in 2022, as supply constraints and higher inflation will probably slow the recovery of activity towards its pre-crisis trend.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Credit Quality Trend: <\/strong> Ongoing loose fiscal and monetary policy should continue support a gradual decline in the European default rate to 2.5% during 2022.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Market Technicals: <\/strong> We expect less new bond supply from IG NFIs and Financials in 2022 than in 2021, while supply from high yield non-financials should be comparable to this year.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Valuation &amp; Timing: <\/strong> We expect the credit-market environment to be volatile in 2022, though spread-tightening momentum will resume later in the year. The iBoxx NFI Senior NFI Index is expected to end the year at 40bp, and the Financials Senior Index at 45bp. The iBoxx NFI Subordinated Index is expected to tighten to 150bp and high yield NFI credit risk premiums to 280bp by the end of next year.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Sector Allocation &amp; Recommendation Overview: <\/strong> Within non-financials investment grade credit, we prefer hybrids over seniors, as they have a lower duration and provide a better buffer against higher interest rates. In terms of sectors, we have overweight recommendations on Automobiles &amp; Parts, Basic Resources, Oil &amp; Gas and Health Care and underweight recommendations on Travel &amp; Leisure, Retail, Utilities and Chemicals. In Financials, we prefer Bank AT1s. We also expect ESG investments become more important, leading to a moderate increase in 'greenium'.<\/p><\/li><\/ul>","synopsisDe":"","synopsisIt":"","analysts":[{"first":"Stefan","last":"Kolek","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=analyst&tx_research_piedition%5Banalyst%5D=12&tx_research_piedition%5Baction%5D=analyst&tx_research_piedition%5Bcontroller%5D=Edition&cHash=9298fb641841b849139ac696918ecafd"}],"hash":"e0e3fe41bb0833767b9ba0e126fe49559f5a7915f22c0a61ccc3d848b0b7c298","available":"0","settings":{"layout":"detailed","size":"default","showanalysts":"2","showcompanies":"2","showcountries":"2","showcurrencies":"2","nodate":"0","notitle":"0","noproduct":"0","noflags":"0","dateformat":"d M y","nolinktitle":"0","synopsislength":"300","synopsisexpand":"1","shownav":"0","oldestedition":"","limit":"5"}},{"layout":"detailed","uid":24050,"publicationDate":"03 Dec 20","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2020_178685.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVFcI2-vTFR2npiIhNkXBBHa2N8hoO2XWEw==&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2020_178812.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVFcI2-vTFR2n65M1ZiLkezQQ5vDJdlNayQ==&T=1&T=1","protectedFileLinkIt":""},"title":"Shortened version of the Euro Credit Pilot (December 2020)","titleDe":"Gek\u00fcrzte Version des Euro Credit Pilot (Dezember 2020)","titleIt":"","product":"Euro Credit Pilot - Strategy","synopsis":"<p class=\"ucrIndent\"><p>This is a shortened version of the Euro Credit Pilot, which we deem to be an acceptable minor non-monetary benefit under MiFID II.<\/p><\/p><p class=\"ucrIndent\"><p>The COVID-19 pandemic has created unprecedented uncertainty in the global economic outlook, implying low visibility into the future. In our base scenario, while the macro picture might be uncertain, particularly at the beginning of 2021, we expect, however, the credit market to see another strong year, supported by an economic rebound from 2Q and technical factors.<\/p><\/p>","synopsisDe":"<p class=\"ucrIndent\"><p><em>\u00dcbersetzung der englischen Originalversion vom 3. Dezember 2020<\/em><\/p><\/p><p class=\"ucrIndent\"><p><em>Diese Publikation ist eine gek\u00fcrzte Version unseres Euro Credit Pilot, die wir als annehmbare geringf\u00fcgige nicht-monet\u00e4re Zuwendung gem\u00e4\u00df MiFID II betrachten. <\/em><\/p><\/p><p class=\"ucrIndent\"><p>Die COVID-19-Pandemie hat eine noch nie dagewesene wirtschaftliche Unsicherheit geschaffen, was eine hohe Prognoseunsicherheit mit sich bringt. In unserem Basisszenario gehen wir jedoch davon aus, dass der Markt f\u00fcr Unternehmensanleihen trotz der Unsicherheit in der makro\u00f6konomischen Entwicklung, insbesondere zu Beginn des Jahres 2021, ein weiteres starkes Jahr erleben wird. Unterst\u00fctzung kommt dabei vor allem durch eine wirtschaftliche Erholung ab dem 2. Quartal und technische Faktoren.<\/p><\/p>","synopsisIt":"","analysts":[{"first":"Stefan","last":"Kolek","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=analyst&tx_research_piedition%5Banalyst%5D=12&tx_research_piedition%5Baction%5D=analyst&tx_research_piedition%5Bcontroller%5D=Edition&cHash=9298fb641841b849139ac696918ecafd"}]},{"layout":"detailed","uid":17072,"publicationDate":"25 May 20","emaObject":{"protectedFileLink":"\/fileadmin\/Presentations_ex_Marketingpraesi\/Praesentation_Call_ReesForUBK_25May20.pdf","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Presentation - Coronavirus und seine volkswirtschaftlichen Auswirkungen","titleDe":"","titleIt":"","product":"Presentation","synopsis":"","synopsisDe":"","synopsisIt":"","analysts":[{"first":"Stefan","last":"Kolek","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=analyst&tx_research_piedition%5Banalyst%5D=12&tx_research_piedition%5Baction%5D=analyst&tx_research_piedition%5Bcontroller%5D=Edition&cHash=9298fb641841b849139ac696918ecafd"},{"first":"Christian","last":"Weber","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=analyst&tx_research_piedition%5Banalyst%5D=17&tx_research_piedition%5Baction%5D=analyst&tx_research_piedition%5Bcontroller%5D=Edition&cHash=a26980faeef4ce9142739a34dc982028"}]},{"layout":"detailed","uid":21554,"publicationDate":"14 Feb 20","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2020_175974.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVFcI2-vTFR2nw6n3SIBxpGTmDpAUviCpvg==&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2020_176061.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVFcI2-vTFR2nNTt7vdgznH-Jqun0zij8HQ==&T=1&T=1","protectedFileLinkIt":""},"title":"Shortened version of the Euro Credit Pilot (February 2020)","titleDe":"Gek\u00fcrzte Version des Euro Credit Pilot (Februar 2020)","titleIt":"","product":"Euro Credit Pilot - Strategy","synopsis":"<p class=\"ucrIndent\"><p>This is a shortened version of the Euro Credit Pilot, which we deem to be an acceptable minor non-monetary benefit under MiFID II.<\/p><\/p><p><ul class=\"ucrBullets\"><li><strong> Introduction: <\/strong> The outbreak of the coronavirus has already led to the disruption of global supply chains, with numerous producers across sectors reporting production halts at facilities in China. The related uncertainties warrant defensive positioning in European credit.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Macro Outlook: <\/strong> So far there is little data on the initial impact on the global economy, and comparisons with the SARS outbreak in 2002 are not straightforward. But 1Q growth-related data will be negative.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Micro Fundamentals: <\/strong> Sluggish earnings growth in Europe will negatively impact companies\u2019 credit fundamentals.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Credit Quality Trend: <\/strong> The global economic outlook has become clouded, and the risk of economic slowdown in China due to the coronavirus has increased. Thus, the overall credit quality of European companies will likely decrease as indicated by the potential number of fallen angels.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Market Technicals: <\/strong> With the intensification of CSPP purchases, particularly in the primary market, the ECB is providing continuous support.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Valuation &amp; Timing: <\/strong> We are keeping our end-2020 spread projections unchanged.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Sector Allocation &amp; Recommendation Overview: <\/strong> Uncertainties related to the coronavirus and its ramifications for Chinese growth and the global supply chain warrant defensive positioning. In this context, we lower our recommendation on Automobiles &amp; Parts to underweight from marketweight. We also lower our recommendation on Basic Resources to marketweight from overweight.<\/p><\/li><\/ul>","synopsisDe":"<p class=\"ucrIndent\"><p>\u00dcbersetzung der Originalversion vom 14. Februar 2020<\/p><\/p><p class=\"ucrIndent\"><p> Diese Publikation ist eine gek\u00fcrzte Version unseres Euro Credit Pilot, die wir als annehmbare geringf\u00fcgige nicht-monet\u00e4re Zuwendung gem\u00e4\u00df MiFID II betrachten.<\/p><\/p><p> <ul class=\"ucrBullets\"><li><strong> Einf\u00fchrung: <\/strong> Der Ausbruch des Coronavirus hat bereits zu einer Unterbrechung der globalen Lieferketten gef\u00fchrt, wobei zahlreiche Produzenten aus allen Sektoren von Produktionsstopps in chinesischen Anlagen berichten. Die damit verbundenen Unsicherheiten rechtfertigen eine defensive Positionierung im europ\u00e4ischen Kreditmarkt.<\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li><strong> Makro-Outlook: <\/strong> Bislang gibt es nur wenige Daten \u00fcber die ersten Auswirkungen auf die Weltwirtschaft, und Vergleiche mit dem SARS-Ausbruch im Jahr 2002 sind nicht ohne weiteres m\u00f6glich. Aber die wachstumsbezogenen Daten f\u00fcr das 1. Quartal werden negativ sein.<\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li><strong> Mikro-Grundlagen: <\/strong> Das schleppende Gewinnwachstum in Europa wird sich negativ auf die Kreditqualit\u00e4t der Unternehmen auswirken.<\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li><strong> Entwicklung der Kreditqualit\u00e4t: <\/strong> Die globalen Wirtschaftsaussichten haben sich eingetr\u00fcbt, und das Risiko einer wirtschaftlichen Verlangsamung in China aufgrund des Coronavirus hat sich erh\u00f6ht. Somit wird die allgemeine Kreditqualit\u00e4t europ\u00e4ischer Unternehmen wahrscheinlich abnehmen, wie die potenzielle Zahl der \u201egefallenen Engel\u201c zeigt.<\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li><strong> Markttechnische Fragen: <\/strong> Mit der Intensivierung der CSPP-K\u00e4ufe, insbesondere auf dem Prim\u00e4rmarkt, leistet die EZB kontinuierliche Unterst\u00fctzung.<\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li><strong> Bewertung und Zeitplanung: <\/strong> Wir halten an unseren Spread-Prognosen per Ende 2020 fest.<\/p><\/li><\/ul><p> <ul class=\"ucrBullets\"><li><strong> \u00dcbersicht \u00fcber die Sektorallokation und Empfehlungen: <\/strong> Die Unsicherheiten im Zusammenhang mit dem Coronavirus und seinen Auswirkungen auf das chinesische Wachstum und die globale Lieferkette rechtfertigen eine defensive Positionierung. In diesem Zusammenhang senken wir unsere Empfehlung zu Automobiles &amp; Parts auf untergewichten von marktgewichten. Wir senken auch unsere Empfehlung f\u00fcr Basic-Resources auf marktgewichten von \u00fcbergewichten.<\/p><\/li><\/ul>","synopsisIt":"","analysts":[{"first":"Stefan","last":"Kolek","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=analyst&tx_research_piedition%5Banalyst%5D=12&tx_research_piedition%5Baction%5D=analyst&tx_research_piedition%5Bcontroller%5D=Edition&cHash=9298fb641841b849139ac696918ecafd"}]},{"layout":"detailed","uid":21100,"publicationDate":"10 Dec 19","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2019_175468.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVEGHysWJl2NsdbHS0TJ1vmUJDnt4SYQWKQ==&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2019_175539.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVEGHysWJl2NsY9mVAida0HvS49pKYFDFew==&T=1&T=1","protectedFileLinkIt":""},"title":"Shortened version of the Euro Credit Pilot (December 2019)","titleDe":"Gek\u00fcrzte Version des Euro Credit Pilot (Dezember 2019)","titleIt":"","product":"Euro Credit Pilot - Strategy","synopsis":"<p class=\"ucrIndent\"><p>This is a shortened version of the Euro Credit Pilot, which we deem to be an acceptable minor non-monetary benefit under MiFID II.<\/p><\/p><p class=\"ucrIndent\"><p>The late stage of the credit cycle will likely be prolonged by the extraordinary ECB policy measures. Performance in European credit is being pulled in one direction by cyclical headwinds (projected in our below-consensus growth forecast and a mild recession in the US), low earnings growth and upside risks in new-bond supply. It is pulled in another direction by monetary-policy easing, which fuels the hunt for yield. As a result of these forces being exerted on European credit, we expect spreads in the iBoxx Senior NFI and the iBoxx Financials Senior to be flat, on balance, reaching 60bp by the end of 2020, i.e. close to current levels. Thus, carry is expected to be the main source of return in European credit in 2020. Spreads in the iBoxx HY are expected to widen to 450bp during the same period.<\/p><\/p>","synopsisDe":"<p class=\"ucrIndent\"><p><em>\u00dcbersetzung der Originalversion vom 10. Dezember 2019<\/em><\/p><\/p><p class=\"ucrIndent\"><p><em>Diese Publikation ist eine gek\u00fcrzte Version unseres Euro Credit Pilot, die wir als annehmbare geringf\u00fcgige nicht-monet\u00e4re Zuwendung gem\u00e4\u00df MiFID II betrachten.<\/em><\/p><\/p><p class=\"ucrIndent\"><p>Die sp\u00e4te Phase des Kreditzyklus wird wahrscheinlich durch die au\u00dferordentlichen politischen Ma\u00dfnahmen der EZB verl\u00e4ngert. Die Performance der europ\u00e4ischen Credits wird in eine Richtung durch zyklischen Gegenwind (der auf unsere unter dem Konsens liegende Wachstumsprognose, einschliesslich einer leichten Rezession in den USA zur\u00fcckgeht), geringes Ertragswachstum und Aufw\u00e4rtsrisiken bei der Emission neuer Anleihen beeintr\u00e4chtigt. Sie wird durch die geldpolitische Lockerung, die die Jagd nach Rendite f\u00f6rdert in eine andere Richtung gezogen. Aufgrund dieser Kr\u00e4fte erwarten wir, dass die Spreads beim iBoxx Senior NFI und beim iBoxx Financials Senior per Saldo seitw\u00e4rts gehen und bis Ende 2020 60bp erreichen werden, d.h. nahezu auf dem aktuellen Niveau. Daher wird erwartet, dass der Carry im Jahr 2020 die wichtigste Renditequelle f\u00fcr europ\u00e4ische Credits sein wird. Es wird erwartet, dass sich die Spreads bei iBoxx HY im gleichen Zeitraum auf 450bp ausweiten werden.<\/p><\/p>","synopsisIt":"","analysts":[{"first":"Stefan","last":"Kolek","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=analyst&tx_research_piedition%5Banalyst%5D=12&tx_research_piedition%5Baction%5D=analyst&tx_research_piedition%5Bcontroller%5D=Edition&cHash=9298fb641841b849139ac696918ecafd"}]}]

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Dr. Stefan Kolek
EEMEA Corporate Credit Strategist
UniCredit Bank, Munich
Am Eisbach 4 - MRE6CS
80538 Munich
Germany
+49 89 378-12495

Stefan Kolek is a senior credit strategist focusing on emerging European corporate credits. He has more than 15 years’ experience in fixed income and credit research. Stefan has a master’s in e...

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